Xerox Corp has announced that it is acquiring ISG Holdings for US$225 million in a bid to strengthen its payment services unit. The acquisition, analysts say, will bolster its services for clients in the insurance sector. Xerox says the deal will be closed by the end of this financial quarter.
The Norwalk, Connecticut-based software service provider says the acquired company will continue to work independently but under the Xerox brand. It appears that Xerox plans to integrate ISG’s SaaS cloud delivery platform and care management service into its portfolio.
ISG, which has about 700 employees at its two centers in the United States, makes software that reviews medical bills. It has two subsidiaries, StrataCare and Bunch CareSolutions. The operations of both the units will continue to be led by Paul Glover, who will report to Connie Harvey, chief operating officer of Xerox’s commercial healthcare and insurance business.
Analysts say the acquisition expands Xerox’s services to property, third-party administrators, managed-care services providers, governments and self-administered employers. Xerox serves nearly 20 U.S. property, casualty and commercial health insurance companies, who cover almost two-thirds of the nation’s insured population.
“The workers’ compensation industry generates $60 billion in medical payments each year – that equates to approximately 75 million bills in need of financial validation,” said Bob Zapfel, president of Xerox Services.
Xerox Services delivers functions that include transaction processing, toll collection and call center support among a host of other operations. Today 55% of Xerox’s revenue is generated by its services business, and that is expected to rise to 66% by 2017. The business consists of a broad portfolio of enterprises in BPO, information technology outsourcing (ITO) and document outsourcing (DO).